The ____ Is an Absolute Measure of Risk, and the ____

question 112

Multiple Choice

The ____ is an absolute measure of risk, and the ____ is a relative measure of risk.

• A) systematic risk;, unsystematic risk
• B) standard deviation; coefficient of variation
• C) correlation; covariance
• D) security market line; characteristic line

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Definitions:

Dividend Payout Ratio

A financial metric that shows what portion of a company's earnings are distributed to shareholders in the form of dividends.

External Financing

Describes the funds a business acquires from sources outside the company, such as bank loans, venture capital, or issuing bonds and stocks to support operations or expansion.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and profits without increasing its financial leverage or debt.

Net Income

Represents the company's total earnings, reflecting the company's profit after all costs and taxes have been subtracted from revenues.